On Premise VS Cloud

Over the past few decades, data storage has expanded into two major categories – cloud storage, which is hosted by a third party outside of an organization’s four walls, and on premise storage, which is physical servers sitting within the four walls of a company’s brick and mortar building. There are different costs, benefits, management needs, and logistics to the two.

NetGain recently held a webinar in partnership with HPE on the topic of cloud vs on premise storage, and what storage may be right for your business. This webinar was hosted by Shane Wendel, a Consulting Systems Engineer at NetGain with over 20 years of experience, Eric Powers, an HPE Channel Technical Architect, and moderated by John Bennett, an HPE Storage Sales Specialist.

Seventy-three percent of the webinar audience leveraged some sort of cloud services.

What is cloud in general? Eric Powers explained that in his definition, cloud has 3 components:

  • A consumption-based financial model, in which you only pay for what you use
  • The ability to have a single common management hub for all resources
  • Speed and elasticity necessary to deploy resources fast and efficiently to your business

Types of Cloud Services

  • Private Cloud is designed for only one business, and run through that particular business.
  • Public Cloud, Shane Wendel explains, is run by a third party organization, such as Microsoft.
  • Software as a Service (SaaS) is also a very popular aspect of cloud services. John Bennett explained that there are a number of reasons why a business may utilize SaaS. Financially, since it follows the consumption-based cost model, it may make it more affordable for a business to use rather than purchasing an application outright. Software management is another aspect that may be a driving factor to using SaaS; if going through a third party, Bennett explains, the business no longer has to manage that software internally.

Cloud vs On Premise – What’s More Affordable?

Bennett explained that there is a common misconception that cloud is less expensive. Fifty-eight percent of participants believed this as well. Bennett also emphasized that private cloud will typically be more expensive than public, as the cost for public is spread across a larger usage base.

Wendel said that the answer to the question “Is cloud cheaper?” is “It depends.” He explained that the size of the client as well as what they want to use the cloud for can affect costs. It’s important to look at all aspects of moving the cloud, Wendel said, as there are factors that clients may not consider. One of the biggest examples of this is network and bandwidth. By moving to the cloud, the client may need to have a faster network in order to ensure that the user experience is still fast as they access all of their information. As you compare costs of cloud vs on premise storage for your specific organization, it is important to know what will be the most affordable and best experience for your users.

However, costs of on premise storage such as the actual physical servers themselves, the cooling required, and more, can make less financial sense for a business than paying for cloud per month. The maintenance involved in a physical data center may not make sense for organizations either, Powers explained. From updates to managing daily maintenance as well as issues, businesses like startups and Small to Medium sized businesses may not have the ability to manage an on premise storage center.

How Do Organizations Leverage Cloud?

Both Wendel and Powers agreed that typically, businesses use a combination of cloud providers. Powers explained that some compliance requirements, such as HIPAA or financial regulations, make it difficult to move to the cloud. Powers stated that most businesses today combine cloud and on premise storage due to the mobility and cost benefits of this hybrid model. Wendel said that he sees Small to Medium sized businesses using SaaS the most out of all cloud services.

Disaster Recovery and the Cloud

Disaster Recovery is an important backup plan for any business, but many organizations do not have one, Bennett stated. He explained that the cloud can assist in ease of setup for data backup in a disaster recovery plan, as the data mobility benefits of the cloud allow for a fast setup that does not require another physical location. In terms of cost, data backup in the cloud will depend on how often your organization’s data is backed up, Bennett explained. The more often data is backed up, the higher the cost. He stated that knowing what kind of downtime your business can afford is an essential element to planning your disaster recovery and data backup.

Cloud vs On Premise Costs

Why Are Organizations Moving to the Cloud? Powers stated, the biggest driver is cost. He did say, however, that the usage of the cloud affects the cost, as discussed earlier in the webinar. He stressed the importance of discussing different cloud usage models with your I.T. provider in order to find the best fit and best price for your organization. Powers also stated that keeping up with compliance and maintenance of the cloud is important.

Wendel explained some reasons organizations may not move to the cloud. Trust can be factor, he explained, as some organizations do not want a third party to have their data. Networking, he added, is another aspect that could affect the decision, as some businesses are not in a good location for reliable and fast internet connections. Some organizations do prefer a fixed cost as well, Wendel stated, as some businesses do not want a varied cost based on usage, and would rather have the predictable, single cost of on premise storage. Bennett explained on the opposite end of the spectrum, some organizations do not want to buy hardware any longer, so they move to the cloud rather than buying servers.

Bennett explained that prioritizing applications, understanding what is mission critical, and then exploring cloud options is a great way to begin the move to the cloud. This way, your organization can see what options you have for each application, so that you can choose the most cost-effective and efficient model for your business.

On Premise vs Cloud Misconceptions and Final Thoughts

Wendel stated that one misconception he hears is that moving to the cloud means you can get rid of your I.T. team. He explained that this is not true, and that your team is needed just as much to monitor and maintain your cloud services. Due to the cloud’s mobility, cloud services can change often, so you need either a service provider or internal I.T that can keep up with these changes.

Powers said that consulting with someone outside of your organization is something he recommends to customers. That way, misconceptions can be discussed, and your organization’s cloud services can be set up in the most efficient way, if that’s the route you choose to go.

Bennett says that he sees the hybrid of cloud and on premise storage being the choice for most organizations in the near future.

Want to watch the full webinar to learn more about benefits of cloud vs on premise? View it here.

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